Slide 1: AMD Financial Results Third Quarter 2022
AMD FINANCIAL RESULTS Third Quarter 2022 November 1, 2022
Slide 2: Cautionary Statement
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202222 CAUTIONARY STATEMENT This presentation contains forward-looking statements concerning Advanced Micro Devices, Inc. (AMD) such as the features, functionality, performance, availability, timing and expected benefits of AMD products; and AMD’s expected fou
Slide 3: Our Journey
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202233 Expanding Customer & Partner Ecosystem Significant Growth in Data Center and Embedded Strong Balance Sheet Leadership Product Portfolio OUR JOURNEY
Slide 4: Our Leadership Technology
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202244 OUR LEADERSHIP TECHNOLOGY Software Enablement Open-source software co-designed with hardware and optimized for performance across heterogenous solutions Data Center Leadership Delivering innovation in cloud, enterprise, AI and accelerated computing Adva
Slide 5: Our Leadership Products
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202255 OUR LEADERSHIP PRODUCTS Embedded Leadership FPGAs, adaptive SOCs and SOMs, and embedded CPUs and GPUs for a broad set of markets Gaming Top-to-bottom desktop and notebook GPUs, game console and semi-custom SOCs Client Leadership CPUs and APUs for notebo
Slide 6: Quarterly Summary Q3 2022
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 20226 QUARTERLY SUMMARY Q3 2022 ▪ Revenue of $5.6 billion grew 29% y/y driven by growth across Data Center, Gaming and Embedded segments ▪ Client segment revenue decreased due to reduced processor shipments resulting from a weak PC market and a significant inv
Slide 7: Gross Margin Summary Q3 2022
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 20227 GROSS MARGIN SUMMARY Q3 2022 1. See Appendices for GAAP to Non-GAAP reconciliation ▪ Non-GAAP gross margin increase primarily driven by higher Embedded and Data Center segment revenue Non-GAAP1 48% 42% Q3 2021 Q3 2022 GAAP ▪ Gross margin decrease primari
Slide 8: Operating Income (Loss) Summary Q3 2022
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 20228 $0.9B $(0.1)B Q3 2021 Q3 2022 OPERATING INCOME (LOSS) SUMMARY Q3 2022 1. See Appendices for GAAP to Non-GAAP reconciliation GAAP Non-GAAP1 $1.1B $1.3B Q3 2021 Q3 2022 ▪ Operating loss primarily due to amortization of Xilinx acquisition-related intangible
Slide 9: Earnings Per Share Summary Q3 2022
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 20229 EARNINGS PER SHARE SUMMARY Q3 2022 1. See Appendices for GAAP to Non-GAAP reconciliation GAAP Non-GAAP1 ▪ Net income of $66 million, decreased y/y primarily due to amortization of Xilinx acquisition-related intangible assets and increased R&D investments
Slide 10: Q3 2022 Summary P&L | GAAP
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202210 ($ in millions, except per share data) Q3’22 Q3’21 Y/Y Revenue $5,565 $4,313 Up 29% Gross Profit $2,354 $2,086 Up 13% Gross Margin % 42% 48% Down 610 bps Operating Expenses $2,426 $1,141 Up 113% Operating Expense/Revenue % 44% 26% Up 18 pp Operating Inc
Slide 11: Q3 2022 Summary P&L | Non-GAAP
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202211 ($ in millions, except per share data) Q3’22 Q3’21 Y/Y Revenue $5,565 $4,313 Up 29% Gross Profit $2,776 $2,087 Up 33% Gross Margin % 50% 48% Up 150 bps Operating Expenses $1,520 $1,035 Up 47% Operating Expense/Revenue % 27% 24% Up 3 pp Operating Income
Slide 12: Revenue by Quarter
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202212 $3.2 $3.4 $3.9 $4.3 $4.8 $5.9 $6.6 $5.6 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 DATA CENTER, GAMING & EMBEDDED SEGMENTS EACH GREW Y/Y, CLIENT SEGMENT LOWER Y/Y +29% y/y REVENUE ($ in Billions)
Slide 13: Gross Margin (GAAP)
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202213 45% 46% 48% 48% 50% 48% 46% 42% Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Y/Y DECREASE PRIMARILY DUE TO AMORTIZATION OF INTANGIBLE ASSETS ASSOCIATED WITH THE XILINX ACQUISITION $160 million of inventory, pricing & related charges included in Q3’22
Slide 14: Gross Margin (Non-GAAP)
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202214 45% 46% 48% 48% 50% Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 50% Y/Y INCREASE PRIMARILY DRIVEN BY HIGHER EMBEDDED AND DATA CENTER SEGMENT REVENUE $160 million of inventory, pricing & related charges included in Q3’22 non-GAAP gross margin GROSS M
Slide 15: Earnings Per Share (GAAP)
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202215 $0.39 $0.45 $0.58 $0.75 $0.80 $0.56 $0.27 $0.04 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 -95% y/y $1.06 Valuation Allowance Release $1.451 EARNINGS PER SHARE (GAAP) 1. In Q4 2020, AMD released $1.3 billion of its $2.9 billion income tax valuation
Slide 16: Earnings Per Share (Non-GAAP)
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202216 $0.52 $0.52 $0.63 $0.73 $0.92 $1.13 $1.05 $0.67 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 -8% y/y EARNINGS PER SHARE (Non-GAAP)* DOWN Y/Y PRIMARILY DUE TO LOWER CLIENT SEGMENT REVENUE *See Appendices for GAAP to Non-GAAP reconciliation
Slide 17: Q3 2022 Summary Balance Sheet Items
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202217 Q3 2022 SUMMARY BALANCE SHEET ITEMS STRONG NET CASH POSITION Cash flow from operations $965 million; free cash flow $842 million3 Repurchased $617 million of common stock ($ in millions) Q3’22 Q3’21 Y/Y Cash, Cash Equivalents and Short-term Investments
Slide 18: Q3 2022 Segment Results
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202218 Q3 2022 SEGMENT RESULTS ($ in millions) Q3’22 Q3’21 Y/Y Data Center Net Revenue $1,609 $1,108 Up 45% Operating Income $505 $308 Up 64% Client Net Revenue $1,022 $1,692 Down 40% Operating Income (Loss) $(26) $490 Down 105% Gaming Net Revenue $1,631 $1,43
Slide 19: Data Center Segment Q3 2022
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202219 DATA CENTER SEGMENT Q3 2022 ▪ Ten straight quarters of record server processor sales driven by EPYC processors ▪ Expanded deployments of EPYC processors to power over 70 new AMD instances by Azure, Amazon, Tencent, Baidu and others ▪ Strong demand for i
Slide 20: Client Segment Q3 2022
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202220 CLIENT SEGMENT Q3 2022 ▪ PC demand softened and PC OEMs and channel partners focused on reducing inventory ▪ Launched 5nm RyzenTM 7000 series processors, powered by “Zen 4” architecture, to strong reviews Strategic Highlights $1.7B $1.0B Q3 2021 Q3 2022
Slide 21: Gaming Segment Q3 2022
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202221 16% 9% Q3 2021 Q3 2022 GAMING SEGMENT Q3 2022 ▪ Strong demand for game console SOCs as Sony and Microsoft prepare for the holiday season ▪ Launching next-generation RDNATM 3 GPUs with 5nm chiplet design to deliver significant performance increases compa
Slide 22: Embedded Segment Q3 2022
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202222 EMBEDDED SEGMENT Q3 2022 ▪ Record aerospace & defense, and automotive and communications sales ▪ New design win opportunities and deeper customer engagements driven by expanded product portfolio ▪ Energy Sciences Network selected AlveoTM U280-based netw
Slide 23: Financial Outlook – Non-GAAP
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202223 ($ in millions) Q4’223 FY 2022 Revenue ~$5.5 Billion +/- $300 Million Growth of ~14% y/y ~$23.5 Billion +/- $300 Million Growth of ~43% y/y Gross Margin % ~51% ~52% Operating Expenses Operating Expenses/Revenue % ~$1.55 Billion ~28% ~25% Interest Expens
Slide 24: Q3 2022 Summary
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 20222424 Strong Data Center, Embedded and Gaming Segment Performance Gross Margin 42% Non-GAAP GM 50% Operating Cash Flow $965M Revenue $5.6B Up 29% Y/Y Q3 2022 SUMMARY 1 STRONG BALANCE SHEET 1. 1. See Appendices for GAAP to Non-GAAP reconciliation
Slide 25: AMD Commitment to ESG
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 20222525 AMD COMMITMENT TO ESG Governance Delivering industry leading products with integrity, innovation and quality in order to help solve global challenges Social Creating a culture that drives innovation by fostering diversity, inclusion and belonging Envi
Slide 26: Our Next Journey
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 20222626 Large and Compelling $300B TAM World-Class Execution and Focus Unmatched Technology Leadership Expanding Data Center Leadership and Pervasive AI Strong Balance Sheet OUR NEXT JOURNEY DRIVING LONG-TERM SHAREHOLDER RETURNS
Slide 27: Reconciliation of GAAP to Non-GAAP Gross Profit and Operating Expenses
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202227 RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT AND GROSS MARGIN (Millions) (Unaudited) Q4'20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 GAAP gross profit $ 1,451 $ 1,587 $ 1,830 $ 2,086 $ 2,426 $ 2,818 $ 3,028 $ 2,354 GAAP gross margin % 45% 46% 48% 48%
Slide 28: Reconciliation of GAAP Operating Income to Non-GAAP
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202228 APPENDICES RECONCILIATION OF GAAP OPERATING INCOME TO NON-GAAP OPERATING INCOME (Millions) (Unaudited) Q3’22 Q3’21 GAAP operating income (loss) $ (64) $ 948 GAAP operating margin % (1%) 22% Stock-based compensation 269 99 Acquisition-related costs (1) 5
Slide 29: Reconciliation of GAAP to Non-GAAP Net Income and EPS
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202229 (Millions, except per share data) (Unaudited) Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 GAAP net income / earnings per share $1,781 $ 1.45 $ 555 $ 0.45 $ 710 $ 0.58 $ 923 $ 0.75 $ 974 $ 0.80 $ 786 $ 0.56 $ 447 $ 0.27 $ 66 $ 0.04 Loss on debt redem
Slide 30: Total Debt and Free Cash Flow Reconciliation
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202230 (Millions) (Unaudited) Q3’22 Q3’21 7.50% Senior Notes due 2022 $ – $ 312 2.95% Senior Notes due 2024 750 – 2.125% Convertible Senior Notes due 2026 1 1 2.375% Senior Notes due 2030 750 – 3.924% Senior Notes due 2032 500 – 4.393% Senior Notes due 2052 50
Slide 31: Share Count Overview
Q3 2022 FINANCIAL RESULTS – NOVEMBER 1, 202231 Shares (millions) (1) Q1’22 Q2’22 Q3’22 Q4’22 2022 Actual Actual Actual Estimate Estimate Basic shares 1,393 1,618 1,615 1,615 1,563 Dilutive impact from Employee equity grants and warrant(2) 17 14 10 6 10 Diluted shares 1,410 1,632 1,625 1,621 1,573 AP
Slide 32: AMD – Together We Advance
AMD«¢l together we advance_